Use the Following to Answer Questions

question 27

Multiple Choice

Use the following to answer questions .
Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1
-(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1) Suppose the economy is initially at point A. All of the following statements are true except

• A) the economy is in equilibrium at its potential output.
• B) the labor market is in equilibrium.
• C) there is no cyclical unemployment.
• D) there is no structural or frictional unemployment.

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Definitions:

Per Unit Costs

The average cost of production or delivery per individual unit, calculated by dividing total costs by the number of units produced or delivered.

Output Level

is the quantity of goods or services produced within a given period by a firm or economy.

Plant Size

Refers to the scale or capacity of a manufacturing facility or industrial plant, affecting its potential output levels and efficiency.

Output Units

The measured quantity of goods or services produced by a firm or industry.